By on December 7, 2011

December 16 is the day Saab’s fate will be decided. Court appointed administrator Guy Lofalk, who yesterday was ready to pull the plug, pulled it today. Currently, Saab is under creditor protection. However, Lofalk asked the Vänersborg District Court to lift the protection, opening the door to final bankruptcy. In a statement cited by Reuters, Lofalk said:

“Since the required funding has not been received and the stated schedule not been kept, the (Saab) companies lack the ability to pay upcoming liabilities.”

Lofalk also named General Motors’ unwillingness to approve proposed deals. GM had driven what looks like the final nail in the coffin, by denying the deal that was proposed a few days ago:

“We have reviewed Saab’s proposed changes regarding the sale of the company. Nothing in the proposal changes GM’s position. We are unable to support the transaction.”

GM appears to be unwilling to support any sale involving its technology, and without that technology, Saab is worthless. The proposed investors, including a Russian banker who had his banks taken away and who is out on bail, an alleged hedge fund of doubtful pedigree, and a Chinese busmaker, did not install much confidence.

The court in Sweden gave Saab and its creditors until December 15 to submit their opinions. A day after, the court will render a decision. Says Reuters:

“Ending protection from creditors would open the way for them to file for Saab’s bankruptcy. The court already has one claim, which is under suspension.”

Even at Saabsunited, the last bastion of optimism, the moral is sinking:

“Hope for the best, prepare for the worst.”

Automotive News China [sub] reports that “Saab Automobile AB is holding discussions with China’s Zhejiang Youngman Lotus Automobile and a Chinese bank over borrowing about 600 million euros (5 billion yuan) over two years.”

The source of that news is Victor Muller. Basically, what he is proposing is that instead of buying stock, the investment will be made as a loan, most likely secured by what is left of Saab. Good luck with that.

If Saab defaults on the loan, the lender would end up with a Saab shouldered with humongous legacy costs, and with no technology from GM.

Muller told Bloomberg he would need the loan in a “very few days” to avert bankruptcy.

In a very few days? A loan? From China? Is that Muller’s way to say: “It’s over?”

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29 Comments on “Our Daily Saab: Unplugged...”


  • avatar
    philadlj

    I can’t fault GM for wanting to protect its technology from Chinese automakers looking to get a cheap-and-easy boost.

    It makes no business sense whatsoever for GM to allow Saab and its GM-sourced tech to be bought by a potential Chinese rival.

    Similarly, there’s little point in a Chinese company buying into Saab if they don’t get technology in the deal.

    Sentiment for Saab of yore and a future Saab is all well and good, but it doesn’t pay salaries, suppliers, and loans.

    I can understand the hypocrisy of a bailed-out GM refusing to pay it forward and help lil’ old Saab in its time of need…but nothing in this world is free.

    If GM is going to approve the sale of Saab, something tangible has to be in it for them. I just don’t see what that could be.

    • 0 avatar
      Keith_93

      Hardly hypocrisy. Why take a US funded loan, and use those assets to shoot yourself in the foot to help a Dutch and Swedish company send your IP to China?

      • 0 avatar
        Pig_Iron

        GM has already whored it’s piss poor excuse for technology in China for over a decade – there’s nothing new the Chinese can learn from them. It’s a lousy excuse.

  • avatar
    mike978

    Bertel, thanks for the link to saabunited. It was eye-opening to read some of the comments. Some people have no business sense at all and how they can be so deluded is amazing.

  • avatar
    Lokki

    Sic transit SAAB mundi.

  • avatar
    VanillaDude

    If a SAAB crashes into an Oldsmobile, would it make a sound?

  • avatar

    Dr. Kevorkian: “Did somebody call me?”

  • avatar
    Troll

    “The source of that news is Victor Muller. Basically, what he is proposing is that instead of buying stock, the investment will be made as a loan, most likely secured by what is left of Saab. Good luck with that.”

    Thanks for your concern! Unexpected solution but hope it will work out.

  • avatar
    Robert.Walter

    I wonder if the deal will become that young man becomes a contract manufacturer for swabs relocated out of Sweden production (since they didn’t get the EIB loan, what holds mfg there?), or alternatively, the cash is just a loan until SAAB can get out from under GM IP restrictions, by purging thevPhoenix platform of GM IP.

    GM, if you don’t want to be competing againstvSAAB in 5 years, kill it now (alternatively do nothing.)

    By the way, if SAAB fails, is GM it’s senior secured creditor? (Didn’t GM keep some equity and give SAAB or SWAN a loan when it spun SAAB out into the cold?))

  • avatar
    Lokki

    Here now, not dead yet. I’m fine! I’m feeling much better actually. I’ll be up and about and off to China soon! You’ll see!

  • avatar
    Crawfish

    I guess I’m wondering what Bertel will write about after December 17 or so.

  • avatar
    dejal1

    “Pig_Iron

    GM has already whored it’s piss poor excuse for technology in China for over a decade – there’s nothing new the Chinese can learn from them. It’s lousy excuse.”

    Ok, so what’s the real reason?

    • 0 avatar
      Paul W

      Pig Iron isn’t the only one who claims that the technology GM is trying to protect is actually old and not really worth anything – I read the same thing in a newspaper article this morning. The author claimed that the real reason is GM simply wanting to eliminate what could be a strong future competitor in the Chinese market. I don’t know if Pig Iron agrees with that assessment, but it seems to be a common opinion among Saab aficionados.

      • 0 avatar
        Keith_93

        If GM technology is worthless, the Chinese buyer can get Saab without it.

        Oh… except they can’t make any cars without the “worthless” technology.

        Hmmmmmm.

      • 0 avatar
        dejal1

        So, what do we have here:

        The tech is worthless and crappy.
        The believers love Saabs.
        Saabs are built on a platform of worthless crappy tech.

        I can come up with only 1 answer.

        Saabs owners love worthless crappy cars.

        Got it.

      • 0 avatar
        Keith_93

        Heyyyyy… I resemble that remark.

        Ya just put the ignition in the center console and all GM tech is forgiven.

  • avatar
    gslippy

    Fact: Saab sold 32000 cars worldwide in 2010.
    Fact: 600 million Euro = $804 million today

    Paying that much money back over two years would amount to $12562 per car, if Saab could miraculously sell that many for each of the two years, interest-free, of course.

    Not happening.

  • avatar
    daveainchina

    Soo any chance we can not have anymore of the SAAB drama until it’s over? One way or another?

    At this point I feel like it’s just wasting bytes of data…

    ie, some new lifesaver hope comes in only to fail… and dead.. wait not yet. new lifesaver…fail… dead.. wait.. lifesaver, fail, dead.. wait wait not yet..

    yawn..
    Anyone else thinking about the boy who cried wolf?

  • avatar
    binkje

    Interesting background information on mr. antonov: http://rumafia.com/news.php?id=459

  • avatar
    binkje

    Saab Automobile’s administrator Guy Lofalk reports that the company has borrowed new money without his knowledge. It is against the rules of law for a company, write Lofalk in the notification.

    Guy Lofalk notifies Saab Automobile to have pulled on a debt of EUR 3.3 million, about 30 million, during the reorganization. It is a task that Lofalk himself to be found out on 8 December and then only after he sought to stop reconstruction.

    The new debt may be due to the liquidity situation is not paid, writes Guy Lofalk in its notification to Vänersborg:

    “This debt has been incurred without my knowledge or my consent.”

    The administrator determines that the conduct is contrary to the provisions of the law for reorganization and against his instructions to the company.

    Saab Automobile has until December 15 at 13.00 to provide comments on the notification.


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